Panel to review EU carbon border adjustment mechanism and emissions trading scheme

DS639: European Union and its Member States - Carbon Border Adjustment Mechanism 

The Russian Federation submitted its second request for the establishment of a dispute panel to determine whether the European Union's CBAM and alleged export subsidy under the EU scheme for trading greenhouse gas emission allowances are consistent with the EU's WTO commitments. The EU had objected to Russia's first request for a panel at a DSB meeting on 24 July.  

Russia said the CBAM package creates significant trade barriers for covered goods imported into the EU. Russia added that the EU's allocation of allowances to certain companies under the Emissions Trading System (ETS) amounts to an export subsidy intended to strengthen the competitiveness of certain domestic industries. 

The EU said it was extraordinary that Russia — which the EU said continues to "wage its war of aggression against Ukraine" - is seeking to rely on international law to improve access for exports into the EU market. The EU said it would take part in the proceedings, not to legitimize Russia’s actions, but to reaffirm the EU's strong support for the rules-based multilateral trading system. It also expressed confidence that both the CBAM and the ETS are consistent with WTO rules. 

The DSB agreed to the establishment of the panel.   

Argentina, Brazil, Canada, China, India, Indonesia, Japan, the Kingdom of Saudi Arabia, the Republic of Korea, Malaysia, Norway, Paraguay, Singapore, Switzerland, Chinese Taipei, Thailand, the United Kingdom and the United States reserved their third-party rights to participate in the proceedings. 

DS629: Türkiye - Measures Concerning Electric Vehicles and Other Types of Vehicles from China